The tax that trickles down to your lunch

Here is something that should bother every Ilonggo who eats out, rents commercial space, or parks along Riverside Boardwalk: when a property owner’s real property tax jumps from PHP 584,283 to PHP 7.56 million in a single year — a 1,200 percent spike — that cost does not stay on the landlord’s balance sheet. It goes to the tenant. From the tenant, it goes to the menu. From the menu, it goes to you.

That is precisely what happened in Iloilo City when the government implemented its first RPT revision in 18 years, beginning January 2024. The Riverside Group of Companies saw RPT hikes of 1,000 percent for one subsidiary and 1,400 percent for another. Road lots that generate no income at all were hit with increases exceeding 14,000 percent. By 2025, two tenants at the Riverside Boardwalk had closed. A third followed this year. Street parking fees — charges the company says it never wanted to impose — were rolled out simply to keep up.

And now, barely a year into that adjustment, here comes another one.

The Real Property Valuation and Assessment Reform Act, or Republic Act 12001, mandates a new round of market-value-based property assessments nationwide, with revisions required every three years. The Iloilo City Assessor’s Office held public consultations from March 30 to April 1. The Riverside Group showed up and called the proposal “untimely and insensitive.” That is a polite way of saying: we are still bleeding from the last round.

It is worth understanding where the national mandate ends and local responsibility begins — because the distinction matters. The RPVARA caps the RPT increase in the first year of a new Schedule of Market Values at 6 percent of the prior year’s tax. But beyond that first year, the actual tax rates and assessment levels are entirely within the discretion of the Sangguniang Panlungsod. The executive department has proposed capping annual RPT increases at 2 percent — well below the statutory 6 percent ceiling. That sounds reassuring until you realize Riverside is projecting cumulative increases of 10 to 14 percent over three years under the new SMV. The gap between the mayor’s proposal and the business sector’s projections suggests the conversation has not yet produced a shared set of numbers, let alone a shared solution.

The city government has pointed out, correctly, that a Tax Impact Study will be conducted before the new SMV is endorsed to the council, and that assessment levels could be retained or even lowered. But the business sector has heard versions of this before. In 2024, the response to the 300 percent RPT shock was a 40 percent discount — later extended to 2028 — that still left Riverside paying 60 percent of an already massive increase. As the company put it: “The mere grant of token concessions in the form of a discount that can be granted, withdrawn, increased, or decreased any time by those in power is not the proper remedy.”

They have a point. Discounts are political instruments, not fiscal architecture. They can be revoked by the next administration or the one after that. What the business community is asking for — what the city needs — are legislated, structural caps written into local tax ordinances. Predictability is not a luxury. It is what allows a restaurant to set next quarter’s prices, a landlord to offer a two-year lease, and a small vendor to decide whether renting a stall is still worth the gamble.

There is a deeper, more uncomfortable dimension to this story. The Riverside Group disclosed that some of its properties — family-owned lands held for more than a century — have been put up for sale. The Pison family’s roots in Iloilo’s commercial landscape trace back to the muscovado industry of the 1890s. The chimney monument at Pison Rotonda is not just a landmark; it is a marker of how long these families have been part of the city’s economic fabric. When aggressive, market-based tax valuations compel generational landowners to liquidate, the city does not just lose a taxpayer. It risks losing a piece of what makes Iloilo, Iloilo.

This is not a call to freeze valuations forever. Property values in Iloilo have grown enormously — fair market values along Diversion Road jumped from PHP 8,000 to PHP 37,000 per square meter between 2006 and 2024, a 530 percent increase. The city’s real estate boom has made many property owners wealthier, at least on paper. Updating valuations is overdue and legally required. But the way you implement a correction matters as much as the correction itself. And right now, the implementation is compounding: a massive 2024 hike layered with a new RPVARA-mandated revision, hitting businesses still absorbing the first blow while national inflation surged to 4.1 percent in March 2026 — the highest since July 2024 — driven by transport costs and oil price shocks tied to disruptions in the Strait of Hormuz.

City Budget Officer Viminale Capulso warned in 2025 that further RPT reductions would cripple basic services — medicine, garbage collection, social welfare. That is a legitimate concern. The city cannot run on goodwill. But neither can it build sustainable revenue on a tax structure that suffocates the commercial base generating that revenue in the first place.

The Sangguniang Panlungsod has the tools. The RPVARA’s implementing rules explicitly empower the council to legislate customized caps on RPT increases for years beyond the first. The council can adjust assessment levels. It can differentiate between owner-occupied residential properties and large commercial holdings. It can build a phased, multi-year schedule that lets businesses plan rather than panic. What it cannot keep doing is treating discounts as policy. A 40 percent markdown on an unsustainable number is still an unsustainable number — just a smaller one, for now, revocable at any time.

Three tenants closed. Parking fees were imposed. Family lands are being sold. Stockholders have received no dividends. A case sits before the Supreme Court. These are not abstractions. They are the receipts of a fiscal policy that arrived too late, landed too hard, and now risks doing it again before anyone has recovered from the first hit.

The people of Iloilo deserve a city that can fund its services without driving its businesses into the ground. That requires something harder than a discount. It requires the council to sit down and build a tax structure that can survive the next three administrations — not just the next election cycle.